Oracle Stock Soars 36% to $933B Valuation as AI Revenue Projections Hit $144 Billion

Oracle delivered the most stunning earnings forecast in enterprise software history Wednesday, sending its stock soaring 36% in the best single-day performance since 1992 and briefly making co-founder Larry Ellison the world's richest person. The database giant's market capitalization reached $933 billion after the company projected cloud infrastructure revenue will explode from $18 billion in fiscal 2026 to $144 billion by 2030.

The forecast left Wall Street analysts "slack-jawed," with Deutsche Bank's Brad Zelnick stating, "We're all kind of in shock, in a very good way." The stock surge added $244 billion in market value in a single session, more than the entire market capitalizations of companies like Intuit or Booking Holdings.

Record-Breaking Contract Backlog Drives Optimism

Oracle's remaining performance obligations (RPO) - contracted revenue yet to be recognized - soared 359% to $455 billion in the first quarter, driven by what CEO Safra Catz called "four multibillion-dollar contracts with three different customers." The company expects this backlog to exceed half a trillion dollars as additional major customers sign on.

"We signed significant cloud contracts with the who's who of AI, including OpenAI, xAI, Meta, and many others," Catz told investors during the earnings call. The surge reflects Oracle's strategy of securing massive quantities of Nvidia's coveted AI chips and renting that computing power through its Oracle Cloud Infrastructure (OCI) to compete with Amazon Web Services, Microsoft Azure, and Google Cloud.

Oracle's cloud infrastructure revenue is projected to grow 77% in fiscal 2026 to $18 billion, then reach $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years. The aggressive timeline positions Oracle as a major beneficiary of the AI infrastructure buildout that has driven technology stock gains throughout 2025.

OpenAI Partnership Powers Growth Trajectory

While Oracle didn't provide specific details, multiple media outlets have reported that OpenAI represents one of the company's largest customers, potentially accounting for over $30 billion in annual revenue starting in fiscal 2028. The partnership extends beyond simple cloud hosting, with Oracle announcing plans for an AI Database service in October that will allow customers to run AI models from OpenAI and other providers directly on top of data stored in Oracle databases.

"Historically, we don't deal with CEOs. Now we deal with CEOs," said Oracle Executive Chairman and CTO Larry Ellison, highlighting the strategic nature of these AI infrastructure deals. The company's involvement in the $500 billion Stargate AI project - announced at the White House alongside OpenAI and SoftBank - further cements its position in the AI infrastructure stack.

Oracle's capital expenditures will jump to approximately $35 billion in 2026, up from the previous outlook of around $25 billion and last year's $21 billion, as the company builds data centers to support its massive contract commitments.

Analysts Upgrade Despite Execution Risks

Bank of America analysts upgraded Oracle to buy from neutral Wednesday, calling the company's "exceptional backlog" evidence that it has cemented its place as "a key AI enabler." However, some analysts expressed caution about Oracle's ability to fulfill such massive demand in a capacity-constrained environment.

"I don't know if their guidance is actually realistic but the market is buying it," said Enguerrand Artaz, a fund manager at La Financière de l'Echiquier. Bloomberg Intelligence's Anurag Rana noted the RPO surge "could put the spotlight on how the cloud provider plans to fulfill this demand in a capacity-constrained climate."

The optimistic projections came despite Oracle missing earnings and revenue expectations for the first quarter. The company reported adjusted earnings of $1.47 per share versus the $1.48 expected, while revenue of $14.93 billion fell short of the $15.04 billion consensus estimate.

Enterprise Cloud Market Dynamics Shift

Oracle's explosive growth projections reflect broader changes in enterprise cloud purchasing patterns as companies prioritize AI capabilities over traditional cost considerations. The database giant's success in landing premium AI workloads demonstrates that specialized infrastructure providers can compete effectively against hyperscale cloud giants when they offer differentiated capabilities.

For enterprise software buyers, Oracle's trajectory validates the importance of AI-optimized infrastructure in vendor selection processes. The company's ability to secure long-term, multibillion-dollar commitments from AI leaders suggests that organizations are willing to pay premiums for guaranteed capacity and specialized capabilities rather than relying solely on commodity cloud services.

Oracle's stock has gained 45% year-to-date through Tuesday's close, significantly outpacing the S&P 500's 11% gain. The company now ranks as the 10th most valuable member of the S&P 500, surpassing JPMorgan Chase, Walmart, Eli Lilly, and Visa.